Millions of pounds worth of donations to British charities have been blocked or returned by global banks, amid terror financing concerns. Humanitarian operations in Syria, Iraq and Gaza are in jeopardy as a result, a think tank warns.

In recent months, a slew
of international banks including HSBC, UBS and NatWest have
frozen accounts held by UK-registered charities and global NGOs
that deliver aid to crisis-ridden conflict zones.

International development think tank, the Overseas Development
Institute (ODI), warns banks’ “overly risk-averse
action” towards charitable organizations and NGOs in Britain
is a direct result of UK counter-terror legislation.

In a report, published Thursday, the think tank called for the
Treasury to offer banks concrete guidance on how they should
respond to Britain’s counter-terror laws.

Disproportionate targeting of Islamic charities

Muslim charities, based in Britain, argue they are being
disproportionately singled out by UK authorities.

Since April 2012 alone, over 25 percent of all statutory probes
launched by Britain’s Charity Commission have targeted Islamic
organizations. The ODI warns these statistics are troubling.

In its report, ‘UK humanitarian aid in the age of
counter-terrorism: Perceptions and reality,’ the think tank
revealed one charity was forced to forgo donations amounting to
£2 million over the past year due to funds being suspended by a
bank.

The ODI’s research also suggests aid workers based abroad have
had their wages blocked or delayed regularly by banks.

CAGE: Vilified but determined

The ODI's report comes as British charity the Joseph Rowntree
Trust faces increasing pressure from MPs to clarify its
allocation of funds to UK advocacy group CAGE.

The campaign group, which actively seeks to support victims
impacted by the ‘War on Terror,’ liaised with Mohammed Emwazi,
otherwise known as ‘Jihadi John,’ over a number of years.

Its relationship began with the Islamic State executioner when he
visited its modest East London office block in 2009.

After describing Emwazi as a once “beautiful man” who
had endured severe harassment at the hands of UK security
services, the advocacy group’s research director Asim Qureshi was
vilified last week by UK MPs and media commentators.

Hi @UK_CAGE, I ask
again 1) Did MI5 break law re: Emwazi (since you keep bringing
up due process) 2) Why not release full tape of convos?

Investigators are inquiring whether CAGE’s financiers, the
Joseph Rowntree
Charitable Trust,
had ensured the advocacy group was utilizing its grants in an
acceptable manner. The investigation is ongoing.

In a formal statement, the Joseph Rowntree Charitable Trust said
it issued three separate grants to CAGE between 2007 and 2010 –
amounting to £350,000. It clarified further it offered a fourth
grant payment to the advocacy group in January 2014.

The trust maintains it stands by its decision to offer this
funding.

“We believe [CAGE] has played an important role in
highlighting the ongoing abuses at Guantanamo Bay and at many
other sites around the world, including many instances of
torture,” the trust said.

Labour MP John Spellar, however, described CAGE as
“apologists for terrorism.”

He called for supporters and funders of the advocacy group to
dissociate from it entirely.

CAGE is critical of UK authorities’ role in radicalizing Emwazi.
It maintains British spies cannot continue to operate with
impunity, and the state’s secret services should be made
accountable for their actions.

Qureshi, the group’s research director, rejects recent criticism
leveled at the campaign group, and suggests it is politically
motivated.

“Certain media organizations [and] right-wing think tanks
don't like our narrative as it goes against the prevailing
national security paradigm,” he told Reuters.

US ripple effect

The ODI’s report concluded guidance offered by the British
Treasury on how banks should respond to UK counter-terror
legislation is sorely lacking and is the primary reason why
charities’ funds are being blocked.

Tom Keatinge, a financial researcher for the ODI, says America’s
legal and political climate has deeply sensitized global banks to
US regulations.

He argues the “extra-territorial reach” of American
authorities in pursuing banks “has had a chilling effect on
risk appetite globally.”

He stresses global banks’ decision-making processes are often
heavily influenced by American regulations irrespective of their
jurisdiction.

Andrew O’Brien, policy chief at the Charity Finance Group, said
the organization has been inundated with complaints from
charities that Britain’s “counter-terror infrastructure”
risks jeopardizing humanitarian operations in conflict zones such
as Syria.

He warned banks must channel more resources into understanding
their customers and the procedures they undertake to safely
transfer funds.

He also called for banks to offer charities warning in advance of
changing their policies.

The Charity Finance Group policy chief concluded governments and
regulators worldwide must review counter-terror legislation to
ensure it does not adversely affect vital humanitarian work.